The leading cryptocurrency Bitcoin has been in a corrective phase since it reached its all-time high of $111,968 on May 22. The leading coin fell below the key support level of $105,000 to trade at $104,536 at the time of publication, reflecting selling pressure.

However, on-chain data suggests a potential recovery above this critical support level, with a possible retest of BTC's historical high on the horizon. This analysis details the key insights.

BTC Liquidity Clusters Signal Increase Towards $109,000

An assessment of the BTC liquidation heat map shows a notable concentration of liquidity around the price zone of $109,933.

BTC Liquidation Heat Map. Source: Coinglass

Liquidation heat maps identify price levels where large clusters of leveraged positions are likely to be liquidated. These maps highlight areas of high liquidity, often color-coded to show intensity, with brighter (yellow) zones representing higher liquidation potential.

Generally, these cluster zones act as magnets for price action, as the market tends to move towards these areas to trigger liquidations and open new positions.$BTC

Therefore, for BTC, the convergence of a high liquidity volume at the price level of $109,933 indicates strong interest from traders in buying or closing short positions at this price. This creates room for an increase towards the mark of $109,000.

Additionally, the funding rate of the coin remained positive despite its recent price drop. At the time of publication, it stands at 0.005%, according to Coinglass.

BTC Funding Rate. Source: Coinglass

The funding rate is a periodic payment between traders in perpetual futures contracts to keep the contract price aligned with the spot price. When the funding rate is positive, there is a higher demand for long positions.

This means that more traders continue to bet on the BTC price increase, even in the face of strengthening bearish momentum.#MyCOSTrade

BTC Price Fluctuates Between the Support of $103,000 and the Liquidity Zone of $109,000

BTC recorded a modest gain of 1% in the last 24 hours, recovering from the support level of $103,952. If demand increases, this support floor could hold firm and push prices above the psychological barrier of $105,000, potentially targeting $106,307.#EDGENLiveOnAlpha

A clear break above this zone could pave the way for the price area of $109,000, dense with leveraged positions.